Southern cities booming during drought

Melbourne, Hobart and Adelaide are steaming ahead while Sydney and drought-affected regions are struggling to keep up economically, a new report shows.

Even with the closure of the car manufacturing industry, Melbourne's growth over the past four years is the strongest it has been in two decades.

Terry Rawnsley, from SGS Economics, on Monday launched a report looking at the economic performance of Australia's cities and regions and said Melbourne now contributed 39.8 per cent of national GDP growth.

"The patchwork economy we have seen over the past decade has become ever more disparate during 2018/19," Mr Rawnsley said.

"The drought has affected many rural economies across Australia while the perennial underperforming economies of Adelaide and Tasmania are booming.

"Melbourne has reached its highest GDP growth rate on record, yet Sydney's economy continues to slow. I've never seen growth rates like this."

While growth in the Sydney economy weakened, the harbour city still contributed 32.9 per cent of Australian GDP growth in 2018-19, largely focused along the corridor from the Sydney CBD to Macquarie Park.